Montana and coal

Introduction
Montana coal mines produced 41.8 million tons of coal in 2006 (3.6% of the U.S. total), making Montana the 6th-biggest coal-producing state in the country. About a quarter of Montana's coal production (10 million tons) is consumed at the four units of the Colstrip Station, which is the second largest coal-fired power plant west of the Mississippi River. Montana employed 942 coal miners in 2006, 75% of whom were unionized. With an estimated 74.9 billion tons of recoverable coal reserves in 2006, Montana has the largest recoverable coal reserves of any state in the U.S., approximately 119.1 billion tons in reserves - indeed, Montana has 7.5% of the entire world's coal reserves.

Montana had 7 coal-fired generating stations in 2005, with 2,536 MW of capacity, representing 47.3% of the state's total electric generating capacity; Montana ranks 35th out of the 50 states in terms of coal-fired generating capacity. In 2006, Montana's coal-fired power plants produced 18.2 million tons of CO2, 18,000 tons of sulfur dioxide, and 36,000 tons of nitrogen oxide; coal-fired power plants were responsible for 55.6% of the state's total CO2 emissions. In 2005, Montana emitted 34.9 tons of CO2 per person, about 75% higher than the U.S. average.

Montana Governor Brian Schweitzer, dubbed by CBS News' 60 Minutes as the "Coal Cowboy", is a leading proponent of coal to liquid technology (i.e. clean coal). Gov. Schweitzer, a Democrat, proposed an abandoned $15 billion synfuel project in southeast Montana. "The project would require strip-mining to produce the fuel for the coal-fired power plants that would generate electricity for the coal-to-liquids refinery that, in turn, would provide the diesel for the massive stripmining project. It’s an endless cycle that one environmental group terms 'Gov. Schweitzer’s Perpetual Pollution Machine.'

Gov. Schweitzer also supported the leasing of 610 million tons of coal over 9,500 acres near Ashland, Montana, known as Otter Creek coal, which will in part be paid for by Montana taxpayers. On December 21, 2009, the Montana Land Board, made up of five Democrats, including Gov. Schwietzer, voted to support opening up the land to coal development in what is known as the Powder River Basin. Critics of the deal that was bid on by Arch Coal, believe that, "The main beneficiaries of leasing Otter Creek coal won't be coal miners or schools or the Northern Cheyenne or the residents of Powder River County. It will be coal speculators and the proposed Tongue River Railroad."

On November 10, 2009, Gov. Schweitzer spoke in Bismark, North Dakota at an energy seminar and said that clean coal technology will help to generate billions in revenue for Montana and North Dakota. Schweitzer also stated that the new coal plants to be built in the states will be "mine to mouth plants", which are different than the older facilities built decades ago throughout the country.

Gov. Schweitzer noted on December 14, 2009 that he supports expanding wind power in the state, but believes coal ought to be part of Montana's energy future. "We have 30 percent of the coal in America -- 10 percent of the coal on the planet," he said. "Whether we're talking about capturing carbon dioxide from existing coal-fired plants or creating new kinds of coal-capturing devices for news kinds of plants, we're excited about developing our coal."

The Montana Department of Commerce stated in May 2011 that 2010 exports were 33 percent higher than in 2009. Gov. Brian Schweitzer said that there has been growth in exports to countries like Korea which is buying more Montana coal. In June 2011 Governor Schweitzer traveled to China to promote Montana wheat, beef, tourism and energy with an emphasis on coal. Schweitzer stated that there's potential for more Montana coal to be shipped to energy-hungry China in the coming years. Additionally, Gov. Schweitzer Schweitzer was keynote speaker at a conference in Beijing on coal technologies. The governor said that although China also uses a lot of coal, the nation has large reserves and won't be among the Asian nations projected to buy increasing amounts of Montana coal.

Coal's history in Montana
Montana's coal mining industry began on a small scale in 1880, and was well-established by 1900. In 1918, annual coal production peaked at 5 million tons, a relatively minor total compared with states such as Pennsylvania and West Virginia. In the early 20th century, coal mining in Montana was almost entirely underground; one mine alone, the Colstrip Mine in eastern Montana, produced about one-third of the state's coal during the 1930's. Coal mining declined in subsequent decades, but remained relatively stable until the 1950's, when Montana coal mining dropped to a very low level due to the decline of coal-fired locomotives. (While coal mining in Montana in the early 20th century was relatively disaster-free compared with Appalachian mines, a 1943 explosion at the Smith Mine in Washoe, MT, killed 74 coal miners.

In 1970, the Clean Air Act was passed. Mandating sulfur dioxide emissions reductions, this legislation suddenly made lower-sulfur Wyoming and Montana coal considerably more attractive to coal power companies. The result was an explosion of surface coal mining in Montana: annual coal production rose from about 1 million tons in the late 1960's to 29.9 million tons by 1980. From the 1980s onward, production grew more slowly, reaching 37.6 million tons in 1990 and 41.8 million tons in 2006. As Montana's coal today is overwhelmingly surface-mined, productivity is high: 22.0 tons per worker-hour, more than three times higher than the U.S. average of 6.3 tons per worker-hour.

Although most coal mined in Montana is exported by train, about 11 million tons is consumed within the state for power generation; in 2005, 90% of Montana's coal-fired generating capacity was accounted for by the Colstrip mine-mouth plant, all four units of which have been built since 1975 (unusual in the U.S., where the median coal plant was built in 1964). Currently, two coal-fired power plants and one coal-to-liquids plant are on the drawing board for Montana.

In the summer of 2009 the Dakota, Minnesota & Eastern Railroad began to abandon a massive rail expansion project in the Powder River Basin, which is located in southeast Montana and northeast Wyoming. The region supplies 40 percent of the total coal production in the United States and the railroad project was set to expand the company's operations into the area to transport coal to regional coal-fired power plants. The economic downturn and rise in climate change awareness are noted as the reasons that led to the decision to back off the plan. Nonetheless, no decision has been made to permanently shelve the project. Nonetheless, the state continues to push to open up its vast reserves, such as the leasing of Otter Creek lands to Arch Coal in early 2010.

Lack of expansion in coal usage
Although Montana's coal reserves actually exceed those of neighboring Wyoming, far more coal is mined in Wyoming, and the discrepancy is expected to continue, according to a 2007 study by the Energy Watch Group. The study noted that while coal production in Wyoming has expanded greatly since the mid-1980s it has grown only modestly in Montana during the same period. The study concluded:


 * ...production of Montana will probably decline or at best grow only slightly – over the last 20 years it has more or less remained around 40 kt/yr. This would be in line with the small reserves at producing mines. But why are the huge estimated recoverable reserves in non producing areas not used? Possible reasons are as follows. Open pit coal mining in Montana is already causing severe environmental burdens. The subbituminous coal is of poor quality because of its high sodium content. Mining causes severe contamination of soils and groundwater. Only 2% of the exististing mines have been reclaimed as yet. Therefore the approval of new mines is politically very controversial (no new surface mines have been approved in the last 20 years) and is in direct conflict with farming interests (the Montana economy relies heavily on cattle farming) and environmental goals. In the decade between 1978-1988 more than 40 new surface mines were approved. But since then no further permit for a surface mine has been given. The last permits for new underground mines were given in 2003, 1994 and 1979. However, underground mines are considerably smaller than surface mines (EIA 1998-2006), (Montana 1998).


 * There is also the problem of finding customers for a significant increase in coal production. Either the coal would have to be transported over long distances to the urban centers in the east of the US (and also existing power stations would have to be adapted to the poor coal quality) or electricity would have to be generated locally and then transported to the locations of demand. In both cases huge and expensive new infrastructures (either railways or local power stations in combination with long distance power lines) would have to be built. It is not obvious how this is going to happen any time soon. Another reason for the small contribution of Montana might be the low productivity compared with Wyoming.

Studies on Coal Use in Montana
A survey conducted by the Opinion Research Corporation for TheClean.org and the Civil Society Institute found that Montanans favor renewable energy and energy efficiency over fossil fuels and nuclear power. The survey found that:


 * Almost 70 percent of Montana residents support a moratorium on new coal-fired power plants. When broken down by political party, the freeze on new coal plants is favored by 83 percent of Democrats, 59 percent of Republicans, and 53 percent of Independents.
 * 56 percent of Montana residents prefer energy soures such as solar and wind, increased energy efficiency, and highly fuel-efficient vehicles as a means to achieving independence to foreign energy, as opposed to only 35 percent who favor oil from offshore drilling, more coal power plants, and nuclear power.
 * Only 10 percent of Montana residents favor allowing coal-to-liquids technology. 39 percent oppose subsidies for CTL under any circumstances, and 48% would allow subsidies only with strict environmental controls.

A study released in July 2010 by the Civil Society Institute argued that it was technically and economically viable to retire all coal and nuclear based power in seven Western states, including Montana.

The region covered in the study was said to have enough renewable sources of energy and, combined with energy conservation measures, the transition away from coal and nuclear could take place within 30 years time. In this scenario, according to the Civil Society Institute study, the entire Northwest could retire 11,000 megawatts of coal-fired power and add at least 12,000 megawatts of onshore wind power.

According to a study conducted by Headwaters Economics based in Montana entitled "Fossil Fuel Extraction and Western Economics" reported that Montana coal production accounted for 15% of the total mining employment in the state in 2008. Oil and natural gas accounted for a combined 32% for the same year.

Large-scale carbon sequestration project
In November 2008, the Department of Energy (DOE) awarded $66.9 million to the Big Sky Regional Carbon Sequestration Partnership (BSRCSP) to develop the Department’s seventh large-scale carbon sequestration project. The project will conduct a large-volume test in the Nugget Sandstone formation in Wyoming in an effort to establish the possibility of "safely, permanently and economically" using a geologic formation to store over 2 million tons of carbon dioxide. The DOE is currently estimating the project's cost at over $130 million.

BSRCSP plans to drill a CO2 injection well and inject up to one million tons per year of carbon dioxide at a depth of 11,000 feet. The DOE states that similar geologic formations in the region offer the opportunity to store more than 100 years of CO2 emissions from sources in the area. The CO2 for the project will come from Cimarex Energy’s proposed helium and natural gas processing plant at Riley Ridge in Wyoming.

As additional project that was to be a joint venture between the Canadian province of Saskatchewan and the state of Montana fell through in July 2010. The proposed $270 million project was announced in 2009, and would have involved building a 75-kilometre-long pipeline that was to run between a coal-fired generating plant in Saskatchewan into Montana, where emissions were to be pumped underground. However, the partners in Montana reportedly failed to apply for Federal stimulus money for the project. As a result the project was put on hold.

Helena and Missoula participation
In August, 2007, the city council of Helena quickly voted not to purchase power from Highwood, citing emissions concerns and other factors. Also in August, Missoula mayor John Engen won City Council approval for the City to participate in the project. However three weeks later, Engen reversed his position after receiving hundreds of e-mails and phone calls from constituents opposed to the project. "Coal is a double-edged sword," Engen told the Washington Post. "I sort of felt both edges."

Air permit
In January 2008, Citizens for Clean Energy and the Montana Environmental Information Center appealed the air permit for the Highwood Generating Station with the Montana Board of Environmental Review (BER), raising health concerns and calling for further study of particulate matter emissions. In a 6-1 ruling in April 2008, the BER ordered more research on emissions of particulates less than 2.5 microns in diameter, known as PM2.5. The ruling made the Board the first regulatory body in the nation to order separate measurement and emissions controls for PM2.5. Despite this ruling, Southern Montana announced that they were moving ahead with construction of the plant. Although the plant's boiler cannot be built, the company can work on other parts of the plant.

In October 2008, Montana Environmental Information Center, Citizens for Clean Energy and the Sierra Club asked the EPA to order work halted at the plant because the air permit had still not been finalized. The groups said they would file a lawsuit if the EPA does not act within 60 days.

Plant cancelled
On January 30, 2009, developers of the Highwood plant voted to halt work on the coal plant. Citing regulatory uncertainty and environmental lawsuits, the developers have instead opted to pursue a 120MW plant that will be powered by natural gas with wind turbines for additional power.

Malmstrom Air Force Base CTL plant cancelled
In September 2007, the U.S. Air Force announced that it was considering building a large coal-to-liquids plant at Malmstrom Air Force Base. Gov. Schweitzer publicly announced his support for the project. The plant would have consumed an estimated 20,000 tons of coal and 10 million gallons of water each day, and would have produced 20,000-30,000 barrels of fuel each day, 50-100 megawatts of electricity for sale, and 15,000 tons of carbon dioxide to be stored at an undetermined location.

On January 29, 2009, Air Force officials announced that they had rejected construction proposals and would no longer be pursuing development of the large synthetic fuel plant.

Legislative and legal issues
In March 2009, Sen. Jeff Essmann (R-Billings) introduced Senate Bill 499, which proposes to cut the 15 percent coal severance tax in half for coal mined for so-called "green" projects. The bill would reduce the severance tax to 7.5 percent for coal used in coal power plants or coal-gasification plants that use carbon capture and sequestration technologies. Sen. Essmann said the lower tax would make Montana competitive with states like Wyoming and would help attract new coal projects. Opponents say the bill would do nothing to increase coal production and revenue.

Montana Governor and U.S. Senator Oppose EPA Regulation of Coal Ash
On March 8, 2010 governors from the Western Governor's Association made a statement that the Obama administration should leave coal ash regulation to the states and resist the EPA's effort to reclassify coal ash as a hazardous material. Montana Gov. Brian Schweitzer, the pro-coal chairman of the governor's group, says the EPA's move to regulate coal ash would undercut what he described as "effective regulation by Western states." The governors state that the EPA's reclassification would prevent coal ash from being used in industrial practices like surface pavement. Utah Gov. Gary Herbert says coal-fired electric generation in the West would also be hurt, which would cost ratepayers more money. Gov. Gary Herbert of Utah states that coal-fired electric generation in his state and others would also be hurt and would cost ratepayers more money.

In October 2010 Democratic Senator Max Baucus of Montana stated that supported a measure that would ban the EPA from regulating greenhouse gas emissions. Senator Baucus also said that he and wants Congress to oversee the issue instead.

"That would put too much power into few hands," Baucus said of EPA regulations, as quoted by the Great Falls Tribune following a speech he made at a convention of the Montana Electric Cooperatives' Association.

Judge Rules Coal Bed Methane Wastewater Ponds Unconstitutional
State District Court Judge Jeffrey Sherlock of Helena, Montana in late April 2010 affirmed that the dumping of wastewater from coal bed methane development into so-called evaporation pits violates Montana's Constitution. Judge Sherlock stated that such “water impoundments” are not a beneficial use of the billions of gallons of water that are brought to the surface and dumped into pits or into rivers and streams, calling such practices “a waste of one of Montana’s natural resources.”

As the Northern Plains Resource Council wrote in a press release:


 * In 2003, the Northern Plains Resource Council, the Tongue and Yellowstone Irrigation District, and other allies sued the Montana Board of Oil and Gas Conservation and Fidelity Exploration and Production Company. The suit alleged that allowing ground water to be wasted by dumping it into evaporation pits violates Article IX, Section 3 of the Montana Constitution. The suit did not challenge legitimate beneficial uses of the water, such as stock watering, wildlife habitat, dust suppression and other uses.

In affirming that evaporation pits are unconstitutional, Shylock said, “This Court has no choice but to conclude that such use is not beneficial and, therefore, a waste of one of Montana’s natural resources,” Sherlock said in his decision. “No party to this action has presented any beneficial use that might be gained from causing water to evaporate and be lost from any and all beneficial use.”

In August 2010 Montana Senators Max Baucus and Jon Tester secured $25 million in funding for a Coal-and-Biomass-to-Liquids pilot project for Montana that will be operated by Accelergy Corporation. The coal that is to be used for the project is owned by the Crow Tribe. A press release on the matter stated that approximately 250 jobs would be created.

Congressional Deal Would Transfer Coal Tracts to Texas Company
On March 23, 2011, the federal government stated that it would give an estimated 145 million tons of publicly owned coal to Great Northern Properties based in Houston, Texas under an exchange backed by members of Congress that calls for future royalties and other coal reserves to go to the Northern Cheyenne Tribe. Supporters stated that the deal would likely accelerate mining in Montana and deliver "tens of millions" in revenue to the impoverished tribe.

Montana tribe's $78 billion coal project stalled
In mid-May 2011, it was reported that the Crow Agency tribe of Montana's plan to build a $7 billion coal-to-liquids project was stalled after it failed to attract sufficient financing. As a result, a lawsuit was filed by tribe's partner in the proposal.

A federal judge in Delaware scheduled a hearing following a request by a Texas-based investment group that accused the Crow tribe of backing out of their 2009 development agreement. According to a lawsuit filed this week by Australian-American Energy Co. (AAEC), the Crow Tribe claimed AAEC has failed to make minimum annual expenditures called for under the agreement.

The company stated it has spent more than $10 million toward the project but that "circumstances beyond the parties' control" have slowed its progress. A temporary injunction was filed until an arbitrator was appointed to handle the dispute.

In June 2011 AAEC announced that they had reached an agreement with the Crow Agency and would not pursue a lawsuit.

Joint Rail Through Montana and Wyoming
Approximately 40% of the coal used in the United States comes from 18 immense mines in the Powder River Basin in northeastern Montana. The 103 mile “Joint Line” in Wyoming, the artery through which most Powder River Basin coal reaches the rest of the United States, is the busiest stretch of railroad in the world. The Joint Line handles over 60 loaded coal trains a day, each train more than a mile long. After it passes through the Joint Line, coal then travels over a handful of rail corridors to power plants. the Joint Line is the busiest stretch of railroad in the world. Most Powder River Basin coal originates with the Union Pacific Railroad or the Burlington Northern Santa Fe Railway.

In early May 2011 it was announced that Burlington Northern Santa Fe railway would impose a new tariff for coal dust suppression on its coal train fleet. The tariff came after a March 2011 ruling by the U.S. Surface Transportation Board. The ruling capped a year long battle between the railroad and utilities over just who is responsible to pay for dust suppression along thousands of miles of rail used to connect the Powder River Basin to coal-fired power plants across the U.S. Coal customers will now have to pay an extra few million dollars per year to help control coal dust from loaded trains leaving Wyoming.

In June 2011 A federal panel has rejected an attempt by conservationists to halt the construction of a long-stalled 121-mile railroad that would open a new area of Montana to coal mining.

The Montana Surface Transportation Board said opponents failed to show why the $550 million rail line needed further environmental review. The decision came in response to a petition by the Northern Plains Resource Council and Montana rancher Mark Fix, who lives along the proposed railroad route. The Tongue River Railroad would make it easier to get coal from the basin to ports on the West Coast by providing a new connection to an existing BNSF Railway Company line in Miles City.

Citizen activism
On September 21, 2009 Chuck Kerr with Houston-based Great Northern Properties, which owns lands next to Montana coal properties, urged the state to begin leasing and mining the land. Both private and state coal holdings in Montana must be developed together.

The Northern Plains Resource Council countered that the coal reserves had not been analyzed properly for environmental impacts associated with the mining. Likewise, the Montana Environmental Information Center, said that the revenue projections for the land development are overly inflated and do not take into account dwindling demand for coal or concerns about carbon output.

Montana Land Board Faces Opposition
On February 2, 2010 the Montana Land Board faced vocal opposition from the Northern Plains Resource Council who wants the Land Board to reconsider leasing Otter Creek for mining rights. Former Resource Council President Beth Kaeding claimed that mining in the area would hurt local farmers.

"We feel that strip mining down here, there's no transportation for this, there's going to be so many impacts if this project goes forward," Kaeding said, "and we'd just like those examined and considered before this goes forward."

In mid-February 2010, students spoke in Helena at the public Land Board meeting to oppose lowering the State's bid on Otter Creek coal. In Missoula, students from Hellgate High School protested in the streets in opposition to the Land Board's decision to sell off public lands to coal development, chanting "Hell no to dirty coal!".

On March 18, 2010 the Montana Land Board approved the leasing of Otter Creek coal to Arch Coal. Prior to the Land Board's 3-2 vote, five protesters were arrested at the Land Board's Capitol meeting room while they chanted "Hands off Otter Creek - you're not listening!"

Critics of the approved lease state that there are still many opportunities to halt the mining. They cite the fact that new railroads must be built and those hurdles will have to clear many federal and state environmental regulations. The proposed mines location, which is close to Yellowstone Park, has also caused objections from some in the environmental community. A gold mine was proposed in the past in the same area, but was abandoned due to similar concerns.

In March of 2010 Helena's Independent Record held a readers' poll to gauge support for the Otter Creek lease. The question was as follows: “Do you agree with the Land Board’s decision to approve leasing 570 million tons of state-owned coal for development into a mine in southeastern Montana’s Otter Creek Valley for 15 centers per ton? Seventy-five percent of the responses, 248 of them, were “no.” The other 25 percent of the responses to the unscientific poll, 84 votes, were “yes.”

Opposition to Governor Schweitzer's Otter Creek Position
On March 29, 2010 Montana Governor Brian Schweitzer stated that he will tie the release of frozen state grants to local support for Otter Creek coal tract leases in southeastern Montana. Schweitzer stated that he did not want "any community to use coal money that didn't want to use coal money."

"This money is supposed to be used for schools and he's trying to issue it as a slush fund to spread around the state to curry favor for his administration and essentially buy or blackmail communities' support for coal," said Jim Jensen of the Montana Environmental Information Center (MEIC).

Wrote Schweitzer in a letter to community leaders, "The potential revenue from the sale of Otter Creek coal might allow for your project/projects to be funded. Please return a letter confirming that you ‘support the use of coal money for the completion of your project/projects."

Critics said that Schweitzer's tactics smacks of a Third World dictatorship.

Schweitzer reiterated this position across the state. "[If] coal is produced, the revenues generated are constitutionally required to go to support schools,"said MEIC. "That's true for the $86 million bonus bid as well. What the governor is doing with this strong-armed tactic, which is reminiscent of the typical Banana Republic dictator, is violating his constitutional duty to the (Coal) Trust. He has an absolute obligation and fidelity to the trust, and not to have what's known as divided interest."

Earthjustice Sues State of Montana
On May 14, 2010 the Montana Environmental Information Center ("MEIC") and Sierra Club, represented by Earthjustice, took legal action to challenge the Otter Creek strip mine in southeastern Montana. The lawsuit filed in state court alleged that the state Land Board's decision to lease 572 million tons of coal in Otter Creek for mining, without first examining the potential environmental impact, "violated the state's constitutional and fiduciary obligation to prevent unreasonable environmental degradation."

Group Seeks to Stall Montana Coal Railroad
On July 27, 2010, the Northern Plains Resource Council asked the federal Surface Transportation Board to reconsider its approval of a proposed $550 million railroad that would open new areas of Montana's section of the Powder River Basin to coal mining. The group wants a new environmental impact study done on the railroad proposal, noting that many things have changed since the Board approved the original plan.

BLM denies request to change coal leasing process
On February 8, 2011, the U.S. Bureau of Land Management (BLM) denied a petition brought by WildEarth Guardians and the Sierra Club to change its process for selling access to the nation's most productive coal deposits.

Since 1990, the government has allowed the coal industry to nominate deposits it wishes to mine in the Powder River Basin in northeast Wyoming and southeast Montana. Such deposits typically are located next to existing strip mines in the Powder River Basin. The groups contended that such a change would help create more competition for the leases while improving oversight of coal's contribution to climate change. The groups also asked the government to impose a "carbon fee" on new coal leases to reimburse the BLM for addressing how coal leasing affects global warming. The BLM denied the requests.

Agreement to protect North Fork of Flathead coal mining approved
It was announced on February 15, 2011 that a deal to protect the North Fork of the Flathead in Montana from mining and energy exploration got final approval at a gathering in Washington, D.C., with Montana Sens. Max Baucus and Jon Tester and Canadian Ambassador Gary Doer in attendance.

The Nature Conservancy and Nature Conservancy of Canada will contribute $9.4 million to reimburse mining companies for potential loss of revenue. It was also announced that the Canadian government was looking to pass legislation to permanently protect the area.

British Columbia government representatives pledged to enact new mineral and coal land reserve regulations, a Southern Rocky Mountain Management Plan, and other guidelines that restrict mining and energy development in the Flathead watershed that runs along the Montana and Canadian border.

The Nature Conservancy stated that the 400,000-acre region supports the largest population of grizzly bears in the Canadian interior, along with 69 other mammals, 270 bird species, 25 fish species and 1,200 plant species.

EPA releases list of 44 "high hazard" coal ash dumps
In response to demands from environmentalists as well as Senator Barbara Boxer (D-California), chair of the Senate Committee on the Environment and Public Works, the EPA made public a list of 44 "high hazard potential" coal waste dumps. The rating applies to sites at which a dam failure would most likely cause loss of human life, but does not include an assessment of the likelihood of such an event. Montana has one of the sites, which stores coal combustion waste from Colstrip Steam Plant and is owned by PPL. To see the full list of sites, see Coal waste.

EPA ranks Colstrip power plant among worst in nation for mercury
Environmental group Environment America in January 2011 released a report ranking power plants according to the amount of mercury the plant emits into the air and soil.

The group, using EPA data, ranked a Montana power company the 11th-largest coal-fired polluter of mercury in the nation and the worst among those in Western states. According to its report, ”Dirty Energy’s Assault on our Health: Mercury,” Colstrip Steam Electric Station emitted 1,490 pounds of mercury in 2009. This accounted for most of the 1,726 pounds of mercury released by all of Montana’s power plants that year.

Mon-Dak Energy Alliance
Energy representatives announced in March 2009 that Montana and North Dakota would come together to discuss the potential for future energy development between the two states. Known as the Mon-Dak Energy Alliance, which is made up of oil, gas and mining operators in the two states, have proposed to build a topping plant that would develop up to 22,000 barrels of crude oil per day. In addition, once completed, the facility will include an oil refinery, ethanol plant, bio-diesel, wind farm and a coal-to-liquids conversation center.

On December 8, 2009 fundraising for the project began. Initial costs to build the facility are $180-200 million dollars. Construction of the plant, to be built between Williston, North Dakota and Sidney, Montana, may begin as early as summer 2010.

Operating

 * Hardin Generating Station - Hardin, MT

Active

 * Ambre Energy plant - Southeastern MT
 * Many Stars Coal-to-Liquids - Big Horn County, MT

Cancelled, abandoned, or on hold

 * Bechtel / Kennecot Project Otter Creek, MT
 * Comanche Park Plant, Yellowstone City, MT
 * Nelson Creek Project, Miles City, MT
 * Roundup Coal-to-Liquids, Roundup, MT
 * Roundup Power Project, Roundup, MT
 * Thompson River Co-Gen, Yellowstone City, MT
 * Highwood Generating Station, Great Falls, MT
 * Malmstrom Air Force Base Coal-to-Liquids, Great Falls, MT
 * Crow Nation CFB, Crow Agency, MT

Ambre Energy proposes plant in Montana
Ambre Energy has proposed a $375 million coal plant in southeastern Montana. The plant would produce an estimated 4.4 million tons of high-efficiency coal per year, eventually increasing to as much as 17 million tons per year, by stripping the coal of moisture in 1,000 degree Fahrenheit temperatures. Developers say the process would make it competitive in terms of heat value with more expensive Appalachian coal. The proposed plant would also produce 1.6 million barrels of synthetic crude oil each year. Construction on the project would begin in 2010, with completion scheduled for the second quarter of 2011. To move forward, the project will need a federal loan guarantee from the Department of Energy to back 80 percent of the projected costs with taxpayer money.

Coal lobbying groups
Based in the state capital of Helena, the Montana Coal Council is a non-profit industry association, comprised of the state's major coal operators, shippers, coal generated utilities, holders of coal reserves and other entities that do business with Montana's coal industry.

The executive director of the Montana Coal Council is former timber industry lobbyist, Arthur R. "Bud" Clinch.

In 2011 PPL, which purchased Montana Power Co.'s dams and coal-fired plants in 1999, was listed as one of the top five lobbying spenders in the state of Montana. The company led lobbying spending during the 2007 and 2009 Montana legislative sessions.

Coal power companies

 * Southern Montana Electric Cooperative
 * Headquarters in Billings, MT
 * PPL
 * Great Northern Power Development
 * U.S. Air Force

Existing coal plants
Montana had 7 coal-fired generating stations in 2005, with 2,536 MW of capacity - representing 47.3% of the state's total electric generating capacity.

Click on the locations shown on the Montana map for plant details:

Here is more info on the Colstrip power plant, the only coal power plant in Montana with capacity over 400 MW: Thus, the Colstrip plant single-handedly represents 89.6% of Montana's coal energy generating capacity, 51.3% of the state's total CO2 emissions, and 25.6% of its total SO2 emissions.

Major coal mines
In 2006, these four mines produced 98.3% of Montana's coal.

Signal Peak Mine Reopens
Formerly known as the Bull Mountain mine, the Signal Peak mine, operated by Signal Peak Energy, was reopened for operation in September of 2009. The mine has newly built access to the Burlington Northern Santa Fe railroad that leads to the BNSF's main rail line in Broadview, Montana. The 35 mile line was built at a cost of $105 million.

"This is a mine that will add 25 percent to the over all coal mining that we do in Montana," stated Montana Governor Brian Schweitzer at the mine's reopening.

The Boich Group and FirstEnergy invested $400 million to reopen the mine, which will produce an estimated 12.5 million tons of annually by the end of 2010. On December 3, 2009 the companies announced that they planned to sell much of the coal to growing Asian markets.

Arch Coal leases 9,600 acres in Powder River Basin
On November 12, 2009 Arch Coal (ACI) announced that they are leasing 9,600 acres in southeastern Montana's Powder River Basin. It is estimated that the property holds 731 million tons of coal reserves. The company will pay Great Northern Properties five annual installments of $73.1 million.

Montana considers leasing mining rights in Powder River Basin
The state of Montana is also considering leasing the rights to mine its 616 million tons of coal reserves known as Otter Creek in the Powder River Basin. Montana received the reserves from the Federal Government at the beginning of the decade. The State Board of Land Commissioners is set to make a decision on the leases in the middle of November, 2009. Montana Governor Brian Schweitzer, a proponent of coal development, sits on the board along with other Montana officials. On November 16, 2009, the state Land Board said it would delay the decision on whether to lease its Otter Creek coal tracts until December 21. The bid package proposed by state officials includes a rental fee of $3 per acre and an upfront payment of between 10 cents and 35 cents per ton of coal, which translates to approximately $57 million to $200 million. Developers would also pay the state a royalty of 12.5 percent of the mined coal's market value if mining begins.

Peabody sends Powder River Basin coal to Europe
It was announced in October 2010 that Peabody Energy was exporting production from its Powder River Basin mines to European markets. Peabody exports Powder River Basin coal through existing ports to Europe, Chile and Asia. It is also looking at building a large coal export facility in Oregon. Peabody has contracted 90% of its 2011 production from the Powder River Basin mines, but the company stated that it has coal volumes available for 2012 and 2013.

August 2010: Pace Coal Project kicks off
In April 2010, American Power Corporation acquired roughly 29,000 acres, which make up the so-called Pace Coal Project. It is estimated that there is in excess of 410 million tons of high volatility bituminous coal potential on the Pace acreage in the area proposed for mining in the Judith Basin. American Power is a member of the Montana Mining Association, and holds approximately 29,000 acres in Judith Basin County, Montana.

September 2010: Coal Mine Cited for Safety Violations
In 2010 three Montana mines have were cited with dozens of safety citations as federal officials step up enforcement against mines that have had repeated problems.

Officials cited the Stillwater platinum mine for 11 violations; Signal Peak Mine, which produces coal, for 44 violations; and Revett Mineral's Troy silver mine for 24 violations.

The citations detailed 21 problems that inspectors said could cause serious injury or illness. The mines drew scrutiny because of past problems, Mine Health and Safety Administration stated.

April 2011: Tennessee plant closure dents PBR coal demand
Following Tennessee Valley Authority's proposed closure of the Johnsonville Fossil Plant in Tennessee, as part of an EPA settlement in April 2011. One million tons of Powder River Basin coal is burned in the plant each year. The closure will phase out 2,700 megawatts of Tennessee Valley Authority’s 17,000 megawatts of coal-fired capacity by 2017.

Montana Land Board Approves Lease
On December 21, 2009, the Montana Land Board voted 4-1 in favor of leasing the mining rights to Otter Creek coal reserves. The board set the minimum bid at 25 cents per ton, which is two-and-a-half times the amount Arch Coal agreed to pay in November for the rights to develop 730 million tons of coal on adjacent, private lands. Coal companies have until February 8, 2010 to submit bids.

It was announced on February 9, 2010 that no mining companies had bid on the state parcels of Otter Creek. Arch Coal and others stated that the reason was the Land Board had placed too high of a price on the land, making it economically risky to invest in mining operations on the state land. On February 16, 2010 the Land Board voted 3-2 to lower the price of Otter Creek coal. The price was lowered from 25 cents a ton ($143 million) to 15 cents a ton ($86 million). In Wyoming, recent coal leases there went for as much as six times that amount, or 96 cents per ton. Land Board officials noted that most of the mines in Colorado were close to other existing mines, which had access to roads and railways. Otter Creek parcels are not close to existing transportation routes, which will require more investments over the long-run.

On March 17, 2010 Arch Coal put in the first bid for rights to mine Montana's Otter Creek coal at $86 million. This would include future royalties for the right to mine a 500 million tons of state-owned coal in southeastern Montana near the Wyoming border in the area known as the Powder River Basin. As of early 2010, Arch controlled 731 million tons of coal in Otter Creek. On March 18 it was announced that the Montana Land Board approved the company's bid in a 3-1 vote and Arch Coal will now have the rights to mine 8,300 acres in the area.

On July 13, 2010 Gov. Schweitzer along with officials of Arch Coal toured the site and answered questions with local media and the Northern Cheyenne tribe. Schweitzer said the coal giant hopes to have permits by 2013, and start mining by 2016.

In all Arch Coal controls 1.5 billion tons of coal on state and private land in Otter Creek. In June, 2010 when the company toured Otter Creek Arch Coal executives stated that they will aggressively pursue state permitting and hope to begin mining by the middle of the decade.

In July 2010, two separate lawsuits were filed by the Sierra Club and Montana Environmental Information Center challenged the state lease on the grounds that the Montana Land Board did not properly address the 2.4 billion tons of carbon dioxide emitted by the mined coal prior to the lease.

In December, 2010 attorneys for the state of Montana defended the lease of 587 million tons of state-owned coal. Representatives of Arch Coal Inc. as well as the Montana Attorney general's office asked a state judge to dismiss the lawsuits challenging the Otter Creek sale. Attorneys for Arch and the state said that review must be done before mining, not at the leasing stage. A decision is likely to come in early 2011.

Judge Upholds Environmentalist Court Challenge
In January 2010 District Judge Joe Hegel rejected an attempt by Arch Coal and the state of Montana to dismiss lawsuits brought in 2010 by four environmental groups. The rejection of the coal industry and state's challenge will allow the groups to move forward with their lawsuit, which claimed that the sale should have been reviewed under the Montana Environmental Policy Act.

Attorneys for Arch and the state had argued such a review must be done before mining, not at the leasing stage. However, Judge Hegel stated environmentalists had made a reasonable claim — that waiting until a mining application comes in could be too late to protect the constitutional right to a clean and healthful environment.

Coal mining to expand on public lands
On March 22, 2011 Secretary of Interior Ken Salazar stated that his office was opening up four tracts of land in Wyoming's section of the Powder River Basin for coal development. The leases are expected to bring in between $13.4 billion and $21.3 billion in leasing bids and royalties to the federal government and the state of Wyoming, stated Salazar. Wyoming will receive 48% of those revenues, with the rest going to the federal government.

The four tracts of land in northeast Wyoming are expected to yield about 758 million tons of coal. A day after Salazar announced the deal to open public lands to mining operations, Marion Loomis, executive director of the Wyoming Mining Association, stated that Salazar's office had overestimated the amount of money the leases would bring in by "a factor of 10". The real amount of money the mines would likely produce will be closer to $2 billion.

On April 6 2011, environmental groups announced that they are challenging the Obama administration's plan to lease federal coal reserves in the Powder River Basin. Three groups, which included the Sierra Club, Defenders of Wildlife and WildEarth Guardians filed a lawsuit in U.S. District Court that contested the federal leasing program for the land in Wyoming and Montana.

The lawsuit stated that a 1990 decision to "decertify" the Powder River Basin as a coal producing region is no longer valid. The groups contend that the decertification has allowed the government to avoid environmental reviews on the climate change impact of burning coal.

On April 20, 2011 the BLM it would sell leases for more than 61 million tons of coal in central Montana. The leases on 2,680 acres near the Signal Peak Mine, will be auctioned in a competitive sale the summer of 2011. The sale would open an additional 72 million tons of private and state coal reserves to potential mining operations.

Northwest ports to be used to export Powder River Basin coal to Asian markets
For more information on the proposed port developments in the western United States please visit the Coal exports from northwest United States ports article.

Proposed Millennium Bulk Logistics Longview Terminal
In September 2010 Peabody Energy announced that "Coal's best days are ahead." Peabody stated that exports of coal from the Powder River Basin in Montana and Wyoming will be central to its expansion goals. The Oregonian in September 2010 reported that Northwest ports, and in particular ports in Portland, Oregon, may be used in the future to export coal to Asia. The Port of Portland said it doesn't have the space for coal exports in the short-term, but its consultants cited coal as a potential long-term market if it adds terminals on West Hayden Island.

In early November 2010 Australia-based Ambre Energy asked Cowlitz County officials in southern Washington State, which borders Oregon, to approve a port redevelopment that would allow for the export of 5 million tons of coal annually. On November 23 Cowlitz County officials approved the permit for the port redevelopment, which is to be located at the private Chinook Ventures port in Longview, Washington. Coal terminals also are proposed at two other sites along the Columbia River.

Environmentalists stated that they would oppose any such actions, arguing that coal contributes to pollution and global warming. Early discussion of how many jobs the port would produce was roughly twenty total.

In November 2010 Powder River Basin coal producer Cloud Peak Energy CEO Colin Marshall stated that a coal port on the West Coast was "absolutely more than a pipedream."

Other Powder River Basin producers, including top US coal miner Peabody Energy, have talked about the potential for a new export facility on the West Coast, with Oregon and Washington being mentioned as the top locations of choice.

Groups including the Sierra Club and Columbia Riverkeeper have vowed to stop the industry's expansion into Asia, a market currently dominated by coal from Australia and Indonesia.

In May 2011 Arch Coal announced that it was establishing a new subsidiary, Arch Coal Asia-Pacific Pte. Ltd., and named Renato Paladino president. A press release stated that Paladino will be responsible for Asia-Pacific regional business development, marketing and sales of thermal and metallurgical products, and regional supply chain expansion for the company. The new office will be located in Singapore.

Proposed Terminal: Gateway Pacific Terminal
The Gateway Pacific Terminal is a proposed terminal at Cherry Point near Ferndale, Washington, and would have a maximum capacity of about 54 million tons. On February 28, 2011, SSA Marine applied for state and federal permits for the $500 million terminal, triggering formal environmental review. If approved, the terminal would begin construction in early 2013 and operations in 2015.

On March 1, 2011, Seattle-based SSA Marine announced it had entered into an agreement with St. Louis-based Peabody Energy to export up to 24 million metric tons of coal per year through the Gateway Pacific Terminal. Goldman Sachs owns a portion of SSA Marine's parent company. According to Peabody, the terminal in Whatcom County would serve as the West Coast hub for exporting Peabody's coal from the Powder River Basin of Wyoming and Montana to Asian markets. The project would ramp up potential U.S. coal exports to Asia from Washington state. Another coal export terminal proposed in Longview, the Millennium Bulk Logistics Longview Terminal in southwest Washington, has drawn environmental opposition. That Millennium Bulk Logistics terminal would be a joint venture between Australia-based Ambre Energy and Arch Coal.

Environmental groups have appealed to Washington's Shoreline Hearings Board over a permit awarded for the port by Cowlitz County commissioners.

According to Gateway Pacific Terminal's website the company plans on providing a "highly efficient portal for American producers to export dry bulk commodities such as grain, potash and coal to Asian markets." Additionally, the site contends that the "Gateway project will generate about 4,000 jobs and about $54 million a year in tax revenue for state and local services. Once in full operation, it's estimated that Gateway will provide almost $10 million a year in tax revenue, create about 280 permanent family-wage jobs directly, and nearly 1,400 additional jobs through terminal purchases and employee spending."

During the week of June 6-10, 2011 SSA Marine filed a permit application the proposed Gateway Pacific Terminal. The application read:

"The applications submitted herein will cover the difference in scope between that approved project and our full buildout plan."

The earlier permit was noted in the application was approved by the Whatcom County Council in 1997. At that time, it envisioned a 180-acre development that would handle 8.2 million tons of cargoes per year, including petroleum coke (produced by local refineries) iron ore, sulfur, potash and wood chips. Coal was not mentioned an an export commodity in the earlier permit.

Citizen groups

 * Citizens for Clean Energy
 * Montana Environmental Information Center
 * Northern Plains Resource Council
 * Climate Ground Zero
 * Northern Rockies Rising Tide

Related SourceWatch articles

 * Existing Coal Mines in Montana
 * Existing U.S. Coal Mines
 * Existing U.S. Coal Plants
 * US proposed coal plants (both active and cancelled)
 * Coal plants cancelled in 2007
 * Coal plants cancelled in 2008
 * Wyoming and coal
 * Powder River Basin
 * Otter Creek
 * Coal Exports from Northwest United States Ports
 * Coal and Native American tribal lands
 * Profiles of other states (or click on the map)